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Congress Reinvigorates False Claims Act

Yesterday Congress enacted the Fraud Enforcement Recovery Act of 2009 (S.386) to curb fraud in the financial services industry and strengthen the False Claims Act (FCA), a statute that was originally enacted in 1863 to deter fraud against the government.  Under the qui tam provision of the FCA, a whistleblower can bring a lawsuit on behalf of the government and is eligible to receive 15% to 30% of the government’s recovery.   Whistleblower disclosures under the FCA have led to the recovery of more than $14 billion in fraud.  In light of the Government’s substantial appropriation of funds to stimulate the economy, it is critical to protect taxpayer dollars against fraud.  The amendments to the FCA, which are designed in part to eliminate loopholes that courts have read into the statute, include:

  • expanding FCA liability to include any false claim for government money or property, regardless of whether the claim was submitted directly to a government official or employee;
  • extending liability to any person who knowingly conceals, avoids or decreases an obligation to pay money to the government;
  • expanding the definition of “claim” to include any request or demand for money or property to a contractor or grantee where the government will pay any portion of the claim, regardless of whether or not the government has title to the money or property;
  • authorizing the Department of Justice to share information obtained from a civil investigative demand; and
  • amending the retaliation provision of the FCA by broadening the scope of protected conduct to include efforts to prevent a violation of the FCA and including contractors and agents in the class of individuals protected from retaliation.

For more information about the False Claims Act and The Employment Law Group® law firm’s False Claims Act Practice, click here.

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